Losses and LAE

3 Months Ended

Mar. 31, 2024

Our reserve for losses and LAE consisted of the following as of the dates indicated.


Reserve for losses and LAE

(In thousands)	March 31, 2024		December 31, 2023
Primary case	$	336,929	$	344,235
Primary IBNR and LAE	11,956		12,177
Pool and other	7,788		8,511
Mortgage insurance	356,673		364,923
Title insurance	5,160		5,225
Total reserve for losses and LAE	$	361,833	$	370,148

Provision for losses consisted of the following.


Provision for losses

	Three Months Ended March 31,
(In thousands)		2024		2023
Mortgage insurance		$	(6,886)	$	(16,864)
Title insurance		(148)		(65)
Total provision for losses		$	(7,034)	$	(16,929)

For the periods indicated, the following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE.


Rollforward of mortgage insurance reserve for losses

	Three Months Ended March 31,
(In thousands)	2024		2023
Balance at beginning of period	$	364,923	$	420,955
Less: Reinsurance recoverables (1)	25,074		24,727
Balance at beginning of period, net of reinsurance recoverables	339,849		396,228
Add: Losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)	53,688		50,579
Prior years	(60,574)		(67,443)
Total incurred	(6,886)		(16,864)
Deduct: Paid claims and LAE related to:
Current year (2)	—		32
Prior years	3,387		2,983
Total paid	3,387		3,015
Balance at end of period, net of reinsurance recoverables	329,576		376,349
Add: Reinsurance recoverables (1)	27,097		23,501
Balance at end of period	$	356,673	$	399,850

(1)Related to ceded losses recoverable, if any, on reinsurance transactions. See Note 8 for additional information.

(2)Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default.

Reserve Activity

Incurred Losses

Total incurred losses are driven by: (i) case reserves established for new default notices, which are primarily impacted by both the number of new primary default notices received in the period and our related gross Default to Claim Rate and Claim Severity assumptions applied to those new defaults and (ii) reserve developments on prior period defaults, which are primarily impacted by changes to our prior Default to Claim Rate and Claim Severity assumptions applied to these loans.

New primary default notices totaled 11,756 for the three months ended March 31, 2024, compared to 10,624 for the three months ended March 31, 2023, representing an increase of 11%. We believe this increase in new primary defaults is mainly due to the natural seasoning of our insured portfolio given the increase in our IIF in recent years and not the result of deteriorating credit performance of the insured portfolio.

Our gross Default to Claim Rate assumption applied to new defaults was 8.0% as of both March 31, 2024, and March 31, 2023, based on our review of trends in Cures and claims paid for our default inventory and taking into consideration the risks and uncertainties associated with the current economic environment.

Our provision for losses during both the first three months of 2024 and 2023 was positively impacted by favorable reserve development on prior year defaults, primarily as a result of more favorable trends in Cures than originally estimated. These Cures have been due primarily to favorable outcomes resulting from positive trends in home price appreciation, which has also contributed to a higher rate of claims that result in no ultimate loss to us and that are withdrawn by servicers as a result. These favorable observed trends for prior year default notices resulted in reductions in our Default to Claim Rate and other reserve assumptions in both 2024 and 2023, including most notably our Claim Severity assumptions in 2024. As the remaining number of defaults has continued to decline, the magnitude of the impact to our provision for losses from reserve development on prior year defaults has declined as well.

Claims Paid

Total claims paid were materially unchanged for the three months ended March 31, 2024, compared to the same period in 2023.

For additional information about our Reserve for Losses and LAE, including our accounting policies, see Notes 2 and 11 of Notes to Consolidated Financial Statements in our 2023 Form 10-K.